Hotel suggestion: maybe look into the Doubletree Suites. You get two rooms for less than the price of a moderate at WDW. They are very nice. We did use the ART some when we stayed there but it is walkable too if you are leaving the parks at a crowded time like after fireworks. Also, the ART is so much faster than the disney system mostly because of the distance but still.
Another option: Stay in Irvine. You can get a really nice true hotel on priceline for $45 a night. The drive is around 20-30 minutes depending on traffic but there are great rest., and entertainment all around there and very close to the beach. We have found that we don't need an afternoon break at the hotel when we do DL even when the kids were 3 and 5. We do one day DL, one day off and repeat. The off days are used for beach and other sites.
There are MANY great dining options around DL but I do think that a car is required for the best trip. You are seriously limited without one. The good news is that you can often find great deals on rentals. I have been able to get standard size cars for less than $100 for a week when going through Costco. A car will enable you to take side trips to the beach (newport is our favorite or Aliso in laguna), see some sites in LA, visit the San Diego Zoo etc. When you add in these trips it make DL a true vacation. The weather makes the trip so nice as well. If you are only interested in the parks then just go to WDW IMO.
My kiddos have been to WDW 7 times and DL 2. When I travel alone with the kids WDW is the way to go. If DH goes with us we prefer DL.